Business, Tourism Groups Denounce Amusement Tax Plan

7Aug2008 Filed under: Economic Development, Erie, Taxes, Tourism Author: Peter Panepento

Three Erie business and tourism groups — VisitErie, the Manufacturer & Business Association and the Erie Regional Chamber and Growth Partnership — have released a joint statement calling on Erie City Council to reject the proposed amusement tax increase.

It’s rare to see these three groups join forces on any issue. So perhaps City Council will pay attention.

Here’s the text of the statement:

“On behalf of the governing bodies and thousands of members of VisitErie, the Manufacturer & Business Association and the Erie Regional Chamber and Growth Partnership, we wish to express our strong opposition to the amusement tax increase from 3 to 5 percent proposed by Erie City Council.

“The regressive amusement tax damages Erie by discouraging entertainment venues from considering this community as a viable tertiary market. It also harms local organizations, many of which survive only because of philanthropy.

“Some believe the amusement tax on ticket sales has no ill effect. Our organizations believe that the entertainment industry in Erie is under attack, and additional taxes will continue to erode the economic impact and quality of life created by such activities in our community. The continued success of our tourism industry depends upon Erie’s ability to offer outside audiences frequent and diverse entertainment options.

“The burden of the amusement tax falls directly on those who purchase tickets, and provides no benefit to those who are forced to pay it.

“If the City of Erie increases the cost of doing business with an amusement tax hike, both margins and participation will erode. The result will be less revenue generated overall. The revenues gained by an amusement tax increase will ultimately be wiped out by the loss of revenues caused by the tax.

“The Erie Regional Chamber and Growth Partnership, VisitErie and Manufacturer & Business Association urge Erie City Council to recognize the risk and reward issues and reject any proposal to increase the amusement tax.”

Tags: amusement tax, Economic Development, Erie, Erie politics, Tourism

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

7 Responses to “Business, Tourism Groups Denounce Amusement Tax Plan”

Jim
August 7th, 2008 at 12:07 pm

Good luck with that. Same arguments that were made, and ignored, originally. I doubt council ever a saw a tax they didn’t like, or want to raise.
DCSassy
August 7th, 2008 at 12:13 pm

I’m not sure I buy into the idea that participation in events will erode because of a 3-5% increase in cost.

Right now, concert goers are paying up to $15 per ticket for a ‘convenience charge’ for every concert ticket. That MIGHT shy away some people, but I would say the majority of people that wish to see a certain show or concert would be willing to pay a couple extra bucks.

I can’t even remember the last time I paid the advertised price for a ticket to anything, with resells on Craigslist and eBay, additional charges, etc.

I don’t really WANT the city to impose the additional fees on people, but I don’t think it will shy away the crowds.

The bigger question is what the city projects this yearly revenue to add up to. What are they planning on using it for?
julio c reyes
August 7th, 2008 at 4:52 pm

Peter,

The amusement tax is one of the most ridiculous things ever did by our pseudo leaders, politicians and everybody involved in this fiasco.

Nobody really considered the effect in paperwork this silly thing has.

Why these people never took the offer made by the nonprofit organization for some payments in lie of taxes is beyond comprehension.

If people remember the original tax was for prices above $5.00 or so and then it was changed to all amounts.

Again, in this case our genius and big thinkers as usual penny wise and dollars fools.

By taking the payment in lie of taxes they would have get the cash they needed but they will also establish a precedent demanding from the big nonprofit organizations in the area to start sharing the cost.
Jake
August 8th, 2008 at 7:58 am

City Councilman Jim Thompson described the Amusement tax as “successful.” How can a tax ever be considered a success?

This is a pure tax on small business. Many of the effected businesses have taken the tax hit rather than raise prices, which is rare, taxes on business are usually a pass through to the customer. If you cahrge 5 bucks for a ticket…you suddenly aren’t going to charge $5.15…you’ll just eat the tax. The impact is to the bottom line of the small business. Concert promoters charging 50 to 100 bucks a ticket won’t blink at whacking the customer a few dollars more. The club owner or small producer has to struggle with the bottom line and the chance of losing the customer if they raise their prices from five to say six dollars…let’s face it…ERIE IS CHEAP! so that dollar can have a real impact.
Isn’t it interesting that the Mayor claims to have a $250,000 surplus going into the end of the year and this “successful tax” has raised, gee…$250,000. It’s high time City Council stops trying to kill small business…enough is enough.
George Vietze
August 8th, 2008 at 8:59 am

I have not been in this area as long as most of you but my observation is that Erie has a great deal of “free” and almost “free” events. The mentality seems to be that a lot of people expect and are used to “free”.
While it is really nice to see the community and residents enjoy these events, I would think it cost money to run these events and to provide the City services necessary to provide safety, traffic, clean up and just basic city services. Considering costs, budgets, labor, tough economic times of trying to run a City the size of Erie the money has to come from some place. I would not want the job of trying to pay for all the City services with the mentality that things should be free or at such minimal costs that they are almost free. The City has to pay in “dollars”
which are not free and must come from someplace. A few extra pennies could be passed on to the consumer and start educating the public that even “free” cost money.

We have a beautiful community with beaches, parks, concerts, events, that tie the community together but it is not “free”. Quality of life cost money, although being retired I appreciate the lower cost of living in this area compared to most other areas but also realize even the basic
services cost money.
Jim
August 8th, 2008 at 10:23 am

People think they know the meaning of words, but sometimes you have to question your own ability to understand the dictionary. Free is one of those words, as it applies in Erie.

Yes there are a number of “free” events. But are they? In many cases there are tax dollars subsidizing those “free” events, sometimes to the tune of five figures. In other cases, the promoters of those free events are subject to a wide variety of fees, depending on the venue, but Liberty Park comes to mind, with the costs associated with trash, port-a-potties, traffic control (?), etc. Those dollars often come from sponsors, chiefly from the business community.

Now about the tax, and its impact on small business. I have heard several sports and entertainment people express concern about the harm that the number of these free events do to their business. Baseball attendance comes to mind. So to some, this tax is viewed as forcing those small businesses to subsidize the “free” events that are in competition with their businesses. It is a similar argument as the hoteliers used in not wanting to collect a tax to be used to subsidize another public financed facility that competes with their business. As we saw, the legal system said, tough, pay up.

At the same time, the arts community is the recipient of a large amount of grant money, both public and private, that some of these businesses who must collect the tax are not able to access. Is that fair? Nope. But like the case with the hoteliers, the system doesn’t seem to care, as council is illustrating. On the other hand, with so many of our eggs being put into the convention and tourism basket, we need a vast number of healthy entertainment venues to occupy the time of our visitors. What bothers me, is that in the final analysis, it will be all about the revenue, and nothing else will matter, if history is any indication.

At some point someone ought to be concerned about reducing the rate of increase in the cost of doing business in Erie, while there are still some businesses left.
Jake
August 8th, 2008 at 1:39 pm

Well Said Jim!
At the end of the day, what are we really talking about here? By their own numbers this tax generates about $75k per point, if there is no errosion in the number of events. So a two point increase = $150K to the city budget of $60 million…it’s like pitching a penny into the Lake and looking for the ripples! Yet the impact on business could be staggering, and where does it stop? Hey what’s a couple more pennies…so the 3% tax becomes 5% and then 7% and then 10%.
Yes…you have to pay for city services, but we also have to look at the impact of the taxes and other factors like greed that go into an ever increasing budget.

Entries (RSS)
Comments (RSS)

About 'Outside Erie'

Peter Panepento After more than six years working as a journalist in Erie, I'm now the web editor for the Chronicle of Philanthropy in Washington, D.C., and the publisher of GlobalErie.com. I still maintain close ties to Erie - a community that I care about deeply. I hope this Web site can help inspire a better future for Erie.

Outside Erie